The Miller Company earned 190000 of revenue on account durin

The Miller Company earned $190,000 of revenue on account during 2016. There was no beginning balance in the accounts receivable and allowance accounts. During 2016 Miller collected $136,000 of cash from its receivables accounts. The company estimates that it will be unable to collect 3% of its sales on account.

The net realizable value of Miller\'s receivables at the end of 2016 was

$54,000.

$48,300.

$49,920.

$59,700.

Solution

Ans: $59700

Explanation:

$0 beginning balance + $190000 revenue on account - $136000 collections = $54000 ending accounts receivable balance

$0 beginning balance + $5700 (190000 x 3%)uncollectible accounts expense - $0 write-offs = $5700 ending allowance for doubtful accounts balance

$54000 - $5700 = $59700 net realizable value